Thailand’s 26th Petroleum Bidding Round: A Bold Andaman Opening for Thailand Upstream Oil and Gas Exploration

The Andaman initiative is positioned as a strategic pivot as production from mature areas faces pressure. One market source describes offshore operations as central to the country’s upstream profile, with the Gulf of Thailand accounting for approximately 90% of Thailand’s total production, and natural gas representing nearly 80% of the upstream resource type. In power generation, natural gas is described as the backbone of the nation’s energy mix, accounting for approximately 60% to 70% as of 2026. Against that backdrop, the Andaman Sea is framed as a new frontier designed to strengthen long-term energy security as existing assets mature and decline, while also supporting investment and employment, plus greater use of domestic goods and services in western Thailand.

Deepwater Economics, Timelines, and What Investors Are Being Asked to Do

The physical and financial challenge of the Andaman blocks is clear in the figures being discussed publicly. The blocks cover deep-water areas ranging from about 200 metres to as much as two kilometres in depth. Drilling an exploration well is expected to require investment of around US$30 million. The DMF has indicated that the first exploration well could be drilled within two to three years after contracts are signed, while first commercial oil or gas production could take around seven years. Another local report describes exploration in the deep Andaman Sea as technically challenging at depths ranging from 1,000 to 2,000 meters, with potential reserves lying more than 3,000 meters below the seabed, and suggests initial exploration drilling could take five to six years.

Policy and fiscal design are also central to the timeline. Thailand’s Energy Ministry has linked progress to Cabinet approval of key fiscal terms, including a geological parameter described as Special Remuneration (SR), which requires Cabinet approval under the law. If approved soon, an invitation could be announced by the end of 2026. Companies would then buy documents and study geological information in a data room in early 2027, followed by proposals and the announcement of successful bidders in the second or third quarter of 2027. In parallel, the DMF is preparing amendments to the Petroleum Act for submission to the Cabinet, including extending development periods and reviewing the government’s fiscal and benefit-sharing arrangements to reduce legal constraints for smaller or more challenging fields.

External market volatility is part of the rationale for moving faster on domestic resources, and the DMF has pointed to prior spot LNG price spikes. Spot LNG prices based on the Japan-Korea Marker (JKM) have previously climbed to around US$29-30 per million British thermal units, adding pressure on imported fuel costs and domestic energy prices. This helps explain why the ministry is trying to find every available domestic resource to reduce imports, while also instructing producers to maximise domestic gas output beyond normal contracted volumes where possible. In this context, Thailand upstream oil and gas exploration is being reframed around de-risking supply and attracting deepwater-capable investors, with the Andaman Sea described as a high-potential area supported by geological continuity arguments linked to discoveries in nearby waters.